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The Future of Internet Grocery Coupons

Food Companies Are Optimistic

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Is seems only natural that the Internet would be the perfect arena for food companies to direct their promotional dollars through providing printable coupons directly to the consumers email box. But due to the influx of Internet coupon fraud, growth in this area came to a slamming halt starting in 2004.

Interest in this area seems to be returning, however as Charles Brown, vice president of marketing for NCH, explained to reporter Thomas Lee. "I can see (Internet coupons) continue to grow," said Brown. "Consumers want coupons and will use the Internet for a lot of information gathering."

A whopping 275 billion dollars was spent on coupons by manufacturers and retailers in 2004. That was an increase of 6.6 percent over 2003 but out of that only 1 percent valued at $3.3 billion in coupons were actually cashed in by consumers.

This demonstrates a lack of proper targeted advertising. Currently the majority of coupons are distributed through newspaper inserts and offers a broad range of products that according to the redemption numbers is not necessarily what the consumer wants. A large majority of the coupons end up in the recycle bins with the rest of the Sunday paper unlike Internet coupons that the consumer searches for and requests using online grocery networks.

Companies like General Mills acknowledge the usefulness of the Internet to help target consumers for specific coupons and see more attention being put toward this direction in the future.

Many grocery stores and food companies could not take the huge losses that coupon fraud was creating so as a result many pulled out of Internet based distribution all together. "While conceptually print-at-home coupons appear to be an excellent opportunity, they are ultimately too insecure for widespread implementation," the report says. "Simply put, the security risks associated with Internet coupons clearly outweigh the potential rewards."

Security efforts are being made to fight against fraud that will allow Internet coupons to safely be distributed in the future. It is advantageous to the consumer and to the companies to offer more target based coupons based on the customers needs. As more solutions are found to fight coupon fraud more coupons will be returning to the Internet. This is good news for coupon clippers nationwide.

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David Kirkpatrick, Senior Editor, Internet and Technology

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